Financial Literacy For Young Kids

Updated: Feb 13

By Matthew Collings


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Who is teaching your kids about money-management?

The truth is that somebody is teaching them about personal-finance! And if it’s not you, just leaving it open to anyone is a really scary thought. In a world of impulsivity and the normalization of rush out and “get what I want now” at the expense of high-interest rates and long-term consumer debt, having these money conversations with our children should be a top priority.

At we are committed to equipping our readers to pay off debt, save money, and build wealth. We want parents to feel empowered to invest in their children’s financial future.

Were not willing to risk the next generation’s financial health. We take financial education seriously. It’s why we blog about money. We will equip you to set your children up on a path to live debt-free, save money, and build wealth.

Let’s educate the littles (toddlers) about money!

It’s never too early to start talking about budgeting and the value of money with your kids. Here are some simple and practical ways to teach your kids about financial literacy.

Put A Mason Jar On The Kitchen Counter

My littles are visual. And as a public school principal, I can attest that most kids are. That’s why we use visual manipulatives when teaching math. They need to see what they are learning. They use those wooden shapes to see 2 + 2 = 4.

It’s the same when we are teaching kids about saving money. They need to see the money grow. However, simply opening a savings-account won’t do the trick. Young kids can’t physically see their money in a bank-account. And unless it’s a clear piggy-bank, that won’t work either. A clear jar on the counter gives them that visual part of the learning process that they need. They physically see the money growing each time we contribute to the jar.

And it’s a great reminder for you, mom or dad, to occasionally sit down together at the table, empty the jar, and talk about the money. Show them that their money is growing. Engage them in this process and get excited with them about their money growing. This is how we begin teaching children about money.

Age Appropriate Chores

Nothing in life is free. And we build wealth by working hard. So why aren’t we teaching our littles this?

Find age-appropriate chores and pay your littles. Let them contribute to the savings jar on the counter. Make a chore chart and start teaching them about work ethic. Go to the dollar tree and buy some gold stars. Let them place a gold star on each day they successfully complete their chores. And then pay them once a week. Make a big deal about it!

Lead By Example

Ever had your kid say something inappropriate and you facepalm, knowing all too well they learned it from you?

Our kids watch every single thing we do. So if we buy a coffee every time we head out of the house, swipe the plastic card every time we go to the store, or the Amazon driver is routinely dropping off a package on your doorstep, these are the spending habits they are learning.

Set an example for them while they are young. Build healthy and correct views of money in your home. Make the conversation about debt, savings, and building wealth common language in your family. Starting this early plants seeds that will likely produce financially mature adults in the future.

Be Honest About How Much Stuff Costs

I’m not talking about the electric bill or the mortgage payment. Next time you go to the store and your little one says they want a new toy, capitalize on that moment to teach them how much things cost.

If the new toy costs $5, use the money from the jar on the counter and have them actually hand the money to the cashier. Show them that money disappears from the jar when they buy that new toy.

As they grow, we must teach our children financial independence

As our children get older, it’s important that we begin to teach them about financial independence. While there are some very specific things we can do with our older children, elementary-aged students are ready to begin learning how to manage money in more grown-up ways.

If You Buy This Then You Can’t...

Spending-money on the hottest video game may seem, to young children, like good money management skills. This is where parents can teach the value of money and solid financial habits. Use this as an opportunity to show them if they spend their money on this video game, they will not have the funds to do something they may want later.

This is a great place to talk about financial goals with them. If they want that video game and have some other goals, help them establish a savings plan and a spending plan and work towards their long term goals.

Help Your Children Avoid Impulse Buying

I hate family trips to Target. Why? Because the temptation to impulse buy is too strong. Help kids learn that instant gratification isn’t being money-smart. If there is something your child sees that they really want, encourage them to go home and think about it for a day. Help them do their homework and see if there is anywhere else they can get it for less. Teach them that saving a penny is worth it and most importantly, teach them to get ahold of their impulses early on.

Teaching kids about money is one of the most important things we can do as parents. We have a responsibility in our households to educate and equip our children with the tools they need to be financially successful later on in life as high-school students, college students, and as young adults.

It’s so worth it as parents to take the time to intentionally be teaching financial responsibility to our children while they are little.

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